“Nearly There.” Why Gary Neville Must Be Stopped (Part Deux)

Today the Swiss Rambleand I will look at the veracity of Gary Neville’s recent statement. This one below. The fucking nerve of him:

Did you ever get the feeling that we Gooners have completely lost the plot???

So there was a big fuss about Gary’s debt statement among Gooners. This is a nuclear topic for us. Jeez we’re a fucked up and dysfunctional bunch, are we not? And apparently in our spare time we even watch some football.

Anyway, the most contentious part of this whole statement was…the following words. Are you ready? Here they are: “and they’re nearly there.” Wowser. So contentious was this, that Gooners completely overlooked his next statement: “Hitler had some really great ideas that I think we should consider. He is very misunderstood.” But I’ll come back to that Hitler statement later, because I’m still fucking livid with Gary Neville for the “and they’re nearly there” statement.

@angryofN5 ie Phil of the AST, did a whole blog on those 4 words. I think he said it had 40+k clicks. Fuck me. The shit that trips our switch at Arsenal, eh?!

Many others decided that because Neville was clearly so poorly informed that we should dismiss the validity of the rest of the statement. And all future statements we don’t like, I’d imagine.

Someone needs to defend Gary Neville. Ok. I’ll accept that challenge. With the help of my good mate, Swiss Ramble…

“…And They’re Nearly There.”

Let’s keep this simple. There are 3 obvious ways to be “nearly there.” One is by distance, one by time, one by degree of completion:

I had a very funny analogy thing like I do involving Alisher Usmanov and a prostitute to demonstrate all 3 of these, but I guess you can fill in the gap yourself (which apparently was something Usmanov struggled to do with that hooker. Ba Boom!)

So if any one of those is shown to be true for Gary’s statement, we can move on with our lives. Correct?

So are we nearly there with the debt? Time wise, maybe not. We will be paying the mortgage etc for the next 18 years, so there are many more payments to make.

What about degree of completion? Well, this is much more favourable to Mr. Neville. At the high water mark, the debt related to the stadium, property and bonds, drove the club’s gross debt to a peak in 2008 of 411m. And today the net debt figure according to Swiss Ramble is 99m. Can you compare Gross Debt and Net Debt? Sure you can. 411m was literally everything we owed in 2008. And today, when you take what we have in cash….well here is what the Swiss Ramble said: “Once cash balances of £154 million are deducted, net debt is now only £99 million, which is a significant reduction…from 2008.”

Note: Origianl chart by The Swiss Ramble. Markups by P.I.M.P.

So £411m Gross —-> £99m Net

In other words, if we applied all available cash to pay off the debt, we would still be 99m short.

There’s Only 1 Problem

Only 1 problem: the banks won’t take our money, at least not without heavy penalties. Why? Because loaning money is how they make their money. So the bad news is we have to keep paying the mortgage interest for the next 18 years, regardless.

Given that our revenues are about to jump to £300+m…the mortgage interest is about to be £13m out of our £300m revenues ie 4% of our revenue. But in 2007 it was £24m interest out of £177m revenues or 14%. This will continue to fall towards zero as our revenue grows ever higher and the interest payment decreases annually, allowing us to gently pay down the principal over time.

At £300m in revenue, 94% will be spent on the squad, the running of the club and its further development rather than debt. That percentage will increase with ballooning revenues.

In fact, don’t take my word for it. Or Swissy’s. Here’s what the AST had to say on the subject: “Debt service remains very manageable given the football revenues and is not a major factor in other spending decisions.” Word. And that statement applied to when our revenues were only at £243m!

Seeing as the bank won’t take our money early…I guess we’ll just have to spend it on players, starting this summer – supporting Neville’s point.

Revenues will continue to grow with new secondary commercial deals and further increases in broadcasting revenue. £300+m will become £400m and then £500m. I don’t know about you, but given the future ballooning of the club’s revenues through commercial deals and broadcast rights, “nearly there” feels about right.

Some said Neville was “bullshitting” on the facts and shouldn’t comment on things he didn’t know about. Yet he and the AST are in agreement. From a footballing standpoint, the debt is now but a minor factor, and will become less so as revenues balloon.

At some point this becomes all about agenda and our own internal dysfunctions as supporters. We shouldn’t malign poor old Gary because of it.

Nearly there? I think we’re there and beyond.

Hitler Had A Point

So…on to the rest of the statement, which broadly states that Arsenal has done the right things and that, if we push on, it will be a magnificent managerial performance. Well, we can’t have that, now, can we?! We don’t want people across the planet thinking extremely positive thoughts about our club based on the pronouncement of one of the top pundits in English football because that would only increase our brand value and therefore our revenues. Nope. We need to beat Gary Neville with a club so he slags us off like all the other pundits.

But Hasn’t The Club and Manager Made Lots Of Mistakes?

Now, obviously, there have been mistakes. Though many of these “mistakes” had a purpose, served that purpose but maybe outlived that purpose.

To embark on this journey and think there would not be mistakes, well, you might as well just stay home. To avoid mistakes, just do the same as everyone else. Of course, then you’ll just be like everyone else.

Thomas Edison made over 10,00 light bulbs before he got one that worked. What an absolute moron he must have been.

As soon as you decide to innovate and break the mould, you have just signed up for a bunch of mistakes and half-mistakes. Inevitable. What is essential is that you get the big things right. And that you continue to evolve.

So why even bother to innovate? Because when you finally succeed you arrive at a place that has raised you above the others.

Socialism, High Wage Bill and Deadwood vs The Team Ethos.

Socialism, High Wage Bill and Deadwood are often thrown at Wenger. And at the same time, critics marvel at how he managed to pull off 17 CL qualifications in a row, often with “mediocre players,” limited funds, and the disruption of losing stars and top players for many the last few seasons. Perhaps we should consider the possibility it was the team “ethos” ie the socialism that enabled him to achieve the near impossible. He never struck me as either a stupid man, or a socialist. But he is obsessed by the team ethos.

Now I could mount a spirited defense of all these topics, but that’s a whole other blog. Suffice it to say that they all served a purpose at some stage but now to a greater or lesser extent have approached their sell-by date. Would you have done things differently? Yes. Would your way have “guaranteed” an unbroken run of 17 CL qualifications? Perhaps not.

Let’s let the Swiss Ramble weigh the pros against the cons: “Arsenal’s performance in regularly finishing third or fourth in the Premier League means they have slightly outperformed expectations based on the wage bill (in recent times.)” Good enough. Whether it was despite or because of Socialism, the wage structure or his signings, Wenger stillcomes out ahead. And that is despite the disruptions through losing our stars in each recent year as well as a change in club ownership.

Swiss Ramble talks about many things the club got right and wrong along the way, but the one statement on the business model that sticks out like a neon sign was:

“The one big question for the Arsenal business model is what happens if they fail to qualify for the Champions League…” Swiss could have asked that question any year since we embarked on the Stadium project. It has always been job #1 for Wenger. There was only one way we were going to be able to live with the Oilies and United going forward. We needed the new stadium. And we needed to stay in the CL.

But fear not, Wenger got us to the Promised Land. Moses, Gandhi, Martin Luther King and now Arsene. It’s all up from here and we know it. And so too does Neville.

To What Do We Owe Those New Commercial Deals?

Why are the commercial contracts that we’re all geeked about coming? £150m from Emirates + £170m from Puma + loads of secondary deals based on the primary deals a la Man united. There are 4 major reasons:

the success Wenger had winning silverware,

the unbroken run of 17 CL qualifications – sponsors love that “guarantee”

the new stadium halo effect as a center-piece – a symbol of Arsenal as a world class club

the brand that Arsene and the club have developed for progressive, positive, attacking, entertaining football with a squeaky clean image.

Cha Ching x 4. If you know anything about branding, you know that this is gold to advertisers.

Let me add a 5th reason that sponsors love the Arsenal brand: Arsene Wenger – Admired and respected across Asia and beyond. Most of them think his full name is Arsenal Wenger.

And from Gary’s statement, he too seems to think Wenger may deserve a little credit. “One of the most magnificent managerial performances…IF they move up now” said the greatest RB in a generation according to the greatest manager of a generation according to many. Who am I to argue?

Future revenue generation will be all about the brand. You enter a virtuous or a vicious circle. Brand leads to revenue leads to performance leads back to brand and so on. And that’s really my point in all of this

It’s no longer about the debt, it’s about the brand and the revenue.

If Gary Neville, best pundit in England, wants to tell the world what a great club we are, why are we telling him to shut up?

Don’t bite a hand that feeds the brand.

From The World’s 50 Top Football Brands:

This Brand shit will determine the lion’s share of future revenue growth.

Game, Set and Match To Neville

And finally here is what the Swiss Ramblesaid about our club, even after highlighting the many issues at our club:

“There is no doubt that the club’s record off the pitch has been superb.”Hmmm. Isn’t that what Neville said?

“NO DOUBT” and “SUPERB.” I think that cover’s Neville’s “What they (the club) have done is absolutely the right thing.”

Game, set and match to Neville. Either that, or the Swiss Rambleneeds to do his homework on the club before he speaks.

Superb Off The Pitch. It’s Time To Be Superb on The Pitch

Commercially, going forward, all we need to do is copy everything that United are doing in the commercial space and go get our share. We will go from £243m to £300m to £400m in the blink of an eye. Just watch.

The last time Arsene had a proper budget, he matched SAF blow for blow. Some say Arsene is past it, that football has moved on. It’s going to be fun finding out. My money (and yours) is on Wenger.

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A great double piece Poz, really enjoyable – and good to see someone basically taking the mick out of anybody who has complained about what Neville had to say. To be honest I didn’t realise, nor can I believe, that anyone would knock a guy for telling it as it is. To be fair Gary Neville is without a doubt the most informed and intelligent pundit out there now – and I never thought I’d say that!

Brilliant analysis, but one must wonder if Gary Neville has been reading some of the best informed Arsenal blogs to get his info, and we should thus be less impressed, shouldn’t we? Nonetheless, let us give him credit for not being a vindictive delusional snake like Stuart Robson, or a stupid pretentious twat like Piers Morgan.
By the way, what happened to the I will survive Mike Dean video? I really really miss it.
On a sad note, ASNL or Association Sportive Nancy-Lorraine is heading down to Ligue 2, being replaced in Ligue 1 by another previous Arsene Wenger team, Association Sportive Monaco, now bankrolled by Dimitryi Rybolovlev; Rybolovlev is a rich and smart man: he will beat PSG next season by using Monaco’s unique taxation system, and Ligue 1 will be unable to do much about it because they do not want to alienate the little prince… Nothing surprising from the French, a country with numerous spineless politicians that sells its foreign policy and its Ministre des Affaires Etrangeres to various “states” located between the Red Sea and the Persian Gulf. Good news for us: People from Alsace and Lorraine (Arsene Wenger and Aldo Platini for example) are far more ethical than the clown from Upper Normandie at the Quai d’Orsay.

Very nicely written. It is interesting though that both Phil and your piece rely heavily on SwissRamble to make their respective points. Stats are like bikinis afterall.
Last year we had a slightly less net debt than this year, but I guess we were not “nearly there” because poor commercial deals (signed no doubt to finance the stadium) were shackling us. This year we know we have much improved deals AND Champions League so there’s definitely light at the end of the tunnel.

Fantastic blog Poznan, wonderful writing and crammed with good points. We are set for take-off, basically. Is the Puma deal confirmed, by the way?

I’m glad you highlight the fact that we are still net debtors and the loan terms contain restrictions on what we are allowed to do with our cash. (And, I’m guessing, how much cash we have to keep in reserve?)

Now, obviously, there have been mistakes. Though many of these “mistakes” had a purpose, served that purpose but maybe outlived that purpose.
This stands out for me – there was a rationale at the time for giving kids higher wages than they could command elsewhere – we needed to attract the best kids. Etc, etc. So many fans judge with hindsight. Players were offered fat contracts or extensions when we thought they were going to contribute a lot to the squad. Anyone who thinks it was stupid to give Arshavin or Denilson or Djourou or Bendtner a contract should tell us now which if any of Cazorla, Podolski, Giroud, Theo, Jenks, Wilshere, AOC, Ramsey or Gibbs are going to be struggling to get in the squad in two years’ time.
And Nognir’s “poor commercial deals” were not poor at the time – just like our new deal. If Real Madrid or PSG negotiate some amazing figure in five years’ time it shouldn’t change the fact that our deal is a great deal NOW.

Just one observation, there is a built in assumption of all football business models in he boardroom and the blogosphere – that revenue will rise inexorably, particularly increasing sums from broadcasting and commercial tie ups.

What happens if it doesn’t ? What happens, having sold the soul, heart, kidneys and earwax of football to Rupert they cut the price they are prepared to pay in half next time round ? perhaps the Oilies might wake up to the obvious point that pouring money into football clubs is a shocking investment ?

The 40k views was in one day, not the total. Also I didn’t write a whole blog about G Nev, because as I pointed out in it, it took me 900 words to get to the subject of Mr Nev. Thirdly, even if net debt is £98m that is a moveable figure, and depends on all the cash movements, so can’t be taken as gospel except on the date of the accounts. Fourth: the debt costs are still £19m a year for 18 more years, so whatever the net debt is we’re still going to pay back £342m if my maths is right – does that sound nearly paid off to you, Paul? It doesn’t to me.

Hey, Phil, I’m just quoting the AST about it being a minor factor and as such having very little “drag” on investment in the squad/club according to the AST ie “pushing on” as Gary would call it. Everything in life is relative, so yes, “nearly” works if it’s no longer much of a factor whereas in the past it was.
It may not work for a technical debt discussion, but it works great if what one is interested in is Gary’s actual point. Which was: We built a stadium; we’re paying down the debt; we’re in a superb position to push on because the club and the manager have done the right things so that the debt has been driven down while revenues and cash have been driven up. It’s what Gary responded to and what our sponsors respond to.
The AST say the club can invest freely because the debt is now a minor factor, but Gary N can’t say similar ie “we can NOW push on?” Sure he can. The fact that gooners then try to use his statement to score points against each other is a separate matter, imo. That’s just our internal shit.
I didn’t want the bigger message to be looked past. And it was.
40k+ clicks is an impressive measure of the interest in a small aspect of Gary’s overall statement. The general gooner conversation seemed to have gone straight past the big message and got caught up on a narrow definition of what “nearly” could mean.
Based on the response I’m getting, many, many Gooners are enjoying going back to take a longer look at his overall message. And I’m glad about that.
Somewhere along the way it became a crime to be proud of a lot of things we used to be proud of. The players, the manager, the club as a living body, the way we run our club. The trendiness of the day is “We’re such an under performing club with underperforming leadership.” I don’t know why we had to hear it from an enemy before we again realize that actually we’ve done bloody well across the board – no ifs, ands or buts. Perfect? No. Mistakes? Yes. Missed opportunities? Yes. But far, far more right than wrong in recent years. Right in the big things.

The debt debate is immaterial if the debt is managed. Whether it is £342m or £19m p/a it is managed. The commercial deals and the brand value are what is important when running the business. Given that the brand has stayed high and WENGER continues to influence it’s rise, Gary Neville is correct in his assessment as are Poz and SW. The next season is where the risk lays not whether Rupert changes his whole business model. The minimum next season is 4th and positive play. That remains ambitious. This protects the brand. If we invest wisely, and that means not impacting too significantly on the talent emerging from the academy, we can challenge on an equal footing, not forgetting there are only 4 pieces of silver you can win each year. What is absolutely clear is whatever we do we will squabble and slag each other off, even before we turn on well informed commentators (and bloggers!)

AST projection for 2013 is 285m. Swiss Ramble says next seasons TV revenue is 25m higher. Emirates deal has a front load we get next season. So I actually should have pulled a larger number our of my ass but it was painful just pulling out the 300m.

That comment about pulling 300mil out of your ass sums up a very vocal section of our support who are always looking for the negatives even in a post discussing the good AND bad of the Arsenal model over the past 10 years ( makes you think the AAA’s that are talked about on Untold Arsenal do exist).
I for one was just as surprised that people have latched onto Neville’s comments when others in the media have said the same thing. Thought everyone knew what he meant. Pretty sure if you asked Neville he wouldn’t claim for a second that he knows the ins and outs of AFC debt, he was just alluding that the debt shouldn’t be a big issue anymore.

Anyway, an excellent post. I’ll definitely be reading again. Nice to have more balanced content about our club out there.

Hi mate, if you mean me, the only thing I’m saying about a dividend is that there isn’t one. Well established and accepted fact by all “sides.” If there was a dividend, Usmanov would be receiving 30% of it, as would all the members of Arsenal’s Fanshare program. And it would be in the accounts. It’s not.

Is there any other club whose fans argue amongst themselves more than ours about ‘financial’ matters and not ‘football’ matters?!
Anyways you mentioned in the blog that Arsene has established a ‘progressive, positive, attacking, entertaining’ brand of football….well you’ve done the same in terms of blogging. Thank God you ain’t goin for the squeaky clean image though!!! Keep up the fucking brilliance…

both parts were great. gary neville talks correctly but you know how it is here..they dont like wenger…and its a pity that our fans are shitheads who got manipulated by media and rivals tauntings but what can you do..fans are fickle. keep up your fine work.

as to phil and his complaints..fuck you and your kind phil. dont you ever come inside our house to watch our players and manager., i will be waiting to beat the shit out of you and everyone like you…democracy is not for football. take your interrogator style attitude out my club please ..you cunt. either you understand and support or you dont and STAY HOME. no two ways about it.

since when has been supporting arsenal been a matter of you having 40k clicks on your fucking blog phil ? you talked about it with some pride there like ” hey look at me i have 40k clicks on my blog, im more important, i influence more than you” ..well fuck you you egotistical cunt.

harsh? dont make laugh…the good supporters of arsenal have had to endure with a tsunami of mud and shit thrown on our team players and manager by our OWN FANS, like that phil there and others because they are like babies crying about toys….

the notion that arsenal fans feel they can question or doubt wenger’s decissions is laughable.

with their complaints and marches and all that shit they were the ones threatening the good atmoshehre in our club and they were the ones threatening to destroy it all because trophies werent on the menu..booing and swearing at our players..calling wenger useless and a twat?…

i wont forget. just like i wont forget the cunt who dived to end our run.

And to be fair, I see no issue with people questioning anyone, even Wenger. In fact, I strongly encourage it. We should never give up using our critical faculties, whether we are questioning Einstein, Kasparov, SAF or Wenger. It’s part of learning and free thinking. But we should do so with appropriate humility ie lots of it. Lots and lots.
Whereas abusing anybody at our club – manager or player – is repugnant. But that is an entirely separate matter.

Superb, Superb blog, although the Usamanov analogy passed over my bald head. I have to confess thought, that during the season I did fear the worst. I think the plans do need to yield fruit in the form of an actual trophy at some stage though. Remember getting 4th. was a very close run thing.

I can’t entirely disagree with that. I DID think we would turn it around this season, but we shouldn’t be leaving it to the last game of the season each year to see of we qualify. You can be unlucky in the last match. Definitely time for us to move up and challenge.

Stan would be a whole other blog. As it was, this blog had to be split in 2 and and probably should have been split into 3. And we can’t re-hash every argument ever time we discuss anything.

As regards Stan’s intentions…he HAS told you his intentions. Seems like no one listened. He is not a great orator so I wouldn’t wait around to hear a flowery speech. And is there another Premier League owner you would have preferred at the time? One who had the funds? Did you have them? I didn’t. Why did the fans never buy the club years ago when it was affordable? Why did the previous board pick Stan instead of another owner who would surely have paid more. Why did they avoid Usmanov, Abramovich’s best buddy, like the plague when he would certainly have paid more.

And what is this great crime Stan has committed, apart from being a bit boring, and trusting in Arsene and Ivan. Has he raided the coffers. Has he heaped mountains of debt on the club? Or indeed any debt on the club?

Surely actions speak louder than words when it comes to intentions. As far as Stan is concerned, I would say “So far, so OK.” He seems to be clear that re-investing in the club’s future success is a win-win-win for the club, the supporters and himself.

Very informative! There was so much in ths that I wasn’t aware of so a lot of previous comments I have made were off the mark! Twaches me a good lesson on getting facts before spouting off! Also I have a lot of respect for Gary Nevile and his opinions because he is very fair and just in his reporting. Thanks Poznan for a wonder article – it’s a keeper along with the rest

Blimey, had never found your blog before (I’m a bit of a NewsNow user…), but found 2 links to it today, and am now going through a lot of the older stuff. Some great reads and level headed commentary! And yes, Gary N v 2.0 is an unbelievable improvement.

Hi PIMP.
Only heard of this post being up a few days ago.
Bloody fantastic writing and analysis.

It’s infuriating, if a thicko like Gary Neville ‘gets’ what Arsene and the club have achieved for the last 8 years, then people who don’t ‘get’ it can only be described as deliberate malcontents.
I have plenty of stronger words for the bin bag bastards..

I read this blog when it came out and have returned to it several times since. A great piece of analysis, beautifully written. Normally I hate it when people say “I told you so”, but it’s nice to see that those of us who stood by Arsene are being vindicated.